TODAY.AZ / Business

Azerbaijan only country in region not dependent on remittances

25 June 2015 [14:04] - TODAY.AZ

/By AzerNews/

By Aynur Karimova

Azerbaijan, which enjoys rapid economic development, macroeconomic stability, improved welfare of its population, as well as growing authority on the world stage, is the only country in the South Caucasus region, which does not depend on remittances from Russia.

Vugar Bayramov, the Chairman of the Center for Economic and Social Development who holds a doctorate in economics, told local media that the Azerbaijanis residing in Russia remit roughly $1 billion annually, which comprises 1.3 percent of GDP.

"If to take cash flows from Russia to Azerbaijan into account, these funds plus the remittances will not exceed 2.5 percent of Azerbaijan's GDP," he said. "According to the World Bank, 21 percent of economy of Armenia, 12 percent of Georgia, 31.5 percent of Kyrgyzstan, 25 percent of Moldova, 42 percent of Tajikistan, 5.5 percent of Ukraine, 4.5 percent of Lithuania and 12 percent of Uzbek economies depends on remittances from abroad."

Bayramov believes that as a result of stagnation in the Russian economy and the sanctions imposed, the amount of funds transferred by Azerbaijani migrant workers to their families decreased by 30 percent in 2014.

"It is expected that this trend will continue in the current year, which, however, will not have a major impact on the Azerbaijani economy," he said.

Russia tops the list of European countries for the largest flow of remittances to foreign countries, a report released by the International Fund for Agricultural Development (IFAD) says.

Nariman Agayev, the Chairman for Research on Sustainable Development Center, confirmed that Azerbaijani migrants remit quite a lot of money to their homeland from a range of countries, the majority of which, roughly $1 billion-1.2 billion, is transferred from Russia.

"Up to $1 billion is being remitted by our migrants from Turkey and the United Arab Emirates. The volume of remittances from the European countries is very small," he noted.

He noted that the Azerbaijani migrants working in European countries practically do not send money back home.

Economic expert Ogtay Hagverdiyev believes that this year, the volume of money transfers from Russia to Azerbaijan will drop to $300-400 million.

"According to Russian media outlets, this figure stood at $700 million in 2014. But even if the amount is at $1 billion, it is less than 1.5 percent of Azerbaijan's GDP. This is not an indicator, which can cause some troubles," he concluded.

Russia’s rouble crisis is posing a major threat to countries along its southern fringe, whose economies rely heavily on billions of dollars shipped home every year by their own citizens working within Russia.

The 50 percent drop in the rouble has not only decimated the value of remittances sent home by workers from the Caucasus and Central Asia, but is discouraging migrants from staying in Russia to earn a salary for themselves and their families.

URL: http://www.today.az/news/business/141710.html

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